Meet the Roosevelters

Time Is Running Out for Obama to Act on a Living Wage

By Richard Kirsch | 03.31.16

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In his last State of the Union address, referring to the need for a higher minimum wage, paid leave, and equal pay for equal work, President Obama declared, “I won’t rest until they get done.” It’s time he used the purchasing power of the federal government to show he means it. As Americans continue to face flat wages and shrinking family incomes, President Obama can act on his own to boost take-home pay and job quality for millions of working families.

Two years ago the president issued an executive order that raised the minimum wage to $10.10 an hour for private sector workers who provide federal government services (such as food or janitorial work) or construction (a new federal building). While that raise is a big help to struggling working families, $10.10 an hour is still far from enough to live on—and it’s not much to brag about when states and cities around the country are moving to a $15 minimum wage over the next few years. Plus, the executive order leaves out millions of workers who receive pay from federal contracts.

Then, last year, President Obama issued another order that seeks to bring all federal contractors in compliance with federal and state labor laws. That action followed findings by the Government Accountability Office and the Center for American Progress Action Fund that many federal contractors are repeat violators of laws meant to protect workers’ wages and working conditions.

But there’s much more the president can do, without Congress, to use the power of the federal purse to reward model employers who make it easier for their employees to care for and support their families. In 2015, the federal government spent $438 billion on contracts with private sector employers; all told, the firms that received those contracts employ tens of millions of people.

Imagine the impact on working families across America if the federal government gave priority in awarding contracts to businesses that paid wages of at least $15 an hour, contributed to health coverage and retirement, and gave employees paid time when they are sick or need to care for a new child, a sick family member, or an elderly parent. Doing so would directly impact a big chunk of the American workforce and set a high standard for other employers to meet.

There is a precedent for giving priority to contractors in the bidding process based on criteria beyond the usual quality of work and price. Currently, large companies that work with small businesses are given extra weight. Providing additional credit in federal bids to companies that boost worker pay would do even more to build thriving communities.

The president can also use his executive authority to lift the incomes and security of working families by requiring companies that receive federal contracts to negotiate with workers who decide to join together and form a union. In doing so, he would follow the path of President Franklin D. Roosevelt, who issued an executive order during World War II that required companies getting war-related contracts to allow their workers to organize unions. That measure helped lay the foundation for the post–World War II economic boom, when a growing proportion of unionized workers boosted wages throughout the economy.

As President Obama said in that State of the Union address:

Companies have less loyalty to their communities. And more and more wealth and income is concentrated at the very top. All these trends have squeezed workers, even when they have jobs; even when the economy is growing. It’s made it harder for a hardworking family to pull itself out of poverty, harder for young people to start their careers, tougher for workers to retire when they want to.

President Obama is running out of time to fulfill his promise to get it done with executive orders. He shouldn’t pass this on to his successor; of the remaining presidential candidates, only Bernie Sanders has committed to issuing these executive orders. Until next January, he has the power to help millions of working families, boost the economy, and set a model for the nation.

Richard Kirsch is a former Roosevelt Institute Senior Fellow and the author of Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States.